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Monday, 7 August 2017

7 August 2017 - Views & News

MARKET INSIGHT

The Nifty is likely to open on flat note followed by Asian markets. The resistance for Nifty is at 10100 level. On downside 9980 would act as support.

Nifty Spot Levels

Support 9988 – 9944 – 9900
Resistance  10106 – 10138 - 10250

GLOBAL MARKET

• The Dow Jones Industrial Average ended at its eighth straight record high on Friday, with gains in JPMorgan Chase and other banks after data showed US employers hired more workers than expected in July.
• The strong jobs report is likely to clear the way for the Federal Reserve to announce a plan to start shrinking its USD 4.2 trillion bond portfolio in September, and could strengthen its case to raise rates for the third time this year in December.
• The Dow Jones Industrial Average rose 0.30% to end at 22,092.81, an all-time high.

MARKET UPDATE

Sgx Nifty  +10 pts Dow +66.71 pts ,Nsdq +11.22 pts , S&P +4.67 pts‎, Bovespa +120 pts , Ftse +36 pts , Dax +143 pts , Cac +72 pts , Nikkei  +111 pts now , Crude @ $52.39 brl (+0.05), Brent @ $51.97 brl (+0.06) , Gold @ 1262.32 (-2.28), Silver @ $16.231 (-0.02), Euro @ $1.1779, JPY @ $109.8100, INR @ $63.675

Today's Corporate Action 7th Aug  Ex Date

BAYERCROP Buy Back of Shares 
BAYERCROP Final Dividend - Rs. - 17.0000
DHANUKA Dividend - Rs. - 0.6000
GODREJCP Interim Dividend - Rs. - 1.0000
ICIL Dividend - Rs. - 0.4000
NAGARCON Dividend - Rs. - 0.4000
TRANSCOR Dividend - Rs. - 0.1600
VALIANTORG Final Dividend - Rs. - 5.0000

Today's Key Result 7th Aug

AMARAJABAT, ANTGRAPHIC, BRITANNIA, CAPLIPOINT, DPL, EVEREADY, FEL, FELDVR, GLOBOFFS, JSLHISAR, LALPATHLAB, LAXMIMACH, MERCK, NATCOPHARM, NILKAMAL, POLARIS, SAKSOFT, SUMMITSEC, TATASTEEL, WELSPUNIND, WHIRLPOOL

TOP NEWS

IOCL: To acquire 50% stake in 5mmt Mundra LNG import; positive read through
Indian oil Corporation (IOCL) is in talks to acquire 50% stake in 5mmt Mundra LNG import terminal in Gujarat as per media reports. Gujarat State Petroleum Corporation and Adani Enterprises are jointly setting-up 5mmt LNG Mundra LNG terminal, which is nearing completion and expected to get commissioned in Q4FY2018 – positive read through for IOCL.

Cadila healthcare: Gets USFDA approval for gNamenda (Memantine hydrochloride) extended release capsules, used to treat moderate to severe Alzheimer's disease and will be manufacture at Moraiya facility – Positive for cadila; Sales of gNamenda capsules are estimated at $1.1 bn (~Rs 7000 crore); Amneal, Apotex, Lupin, Mylan and Sun are other generic players in the market for the mentioned drug.

Jubilant Life Sciences: Receives USFDA final approval for Tizanidine Hydrochloride Capsules (gZanaflex), used for the management of spasticity – Positive for Jubilant Life science.

Auto Luxury Cars & SUV: The GST council has decided to raise the cess on luxury cars (sedan above 4mtr and engine above 1500cc) and SUV from current 15% to 25%. The revised rates would mean overall tax incidence of 53% which is higher than 45-49% tax in pre GST regime. Automakers will likely pass on the tax increase. Sentimentally Negative for M&M and Maruti Suzuki. 

GST council reduced rate on some tractor parts from 28% to 18%. This is in line with the tax rate on tractors thus removing the inverted duty structure.  Positive for M&M and Escorts. 

Tata Motors - Jaguar Land Rover: UK registrations flat for July 2017; Negative for Tata Motors as numbers are below estimates. ….(details in other news)

Eros International: In talks with Apple to sell its content library for around $1 billion – Positive read-thru

As per media news, Eros Group is in talks with Apple Inc to sell its entire content library of films and music for around $1 billion. The deal may also include their digital OTT platform, Eros Now. As per news piece, management is also looking at reverse merger of Eros INC with Indian listed Eros International, to create a single entity.

OTHER NEWS

Power & Banks: IBA may seek Centre's help as states move to rework PPAs with power firms
The Indian Banks Association is planning to seek the Centre’s immediate intervention over state governments scrapping or looking to renegotiate power purchase agreements (PPAs) with thermal and renewable energy producers. State governments such as those of Uttar Pradesh, Andhra Pradesh, Karnataka and Madhya Pradesh are scrapping or seeking fresh pacts on the ground that the tariffs contracted earlier are very high. With power sector stress already contributing to nearly 17% of the overall debt of banks, the fear is that the bulk of the next round of slippages will emanate from this sector. That’s at a time when the government and the Reserve Bank of India are making renewed efforts to resolve banks’ bad loans, regarded as a significant economic risk. We believe if the PPA’s are renegotiated downwards; the power plants may be viable but may affect debt servicing ability.  

Tata Motors - Jaguar Land Rover: UK registrations flat for July 2017; Negative for Tata Motors as numbers are below estimates.
· Jaguar UK registrations declined steeply by 17% YoY to 2,200 units while the Land Rover sales for the month were up 8% YoY to 5,265 units.
·  Overall sales were flat as against our expectation of a double digit growth 

Divis Labs: Unit 2 at Vishakhapatnam inspected, no critical observations – Positive read-thru
Unit 2 at Vishakhapatnam has been inspected by Ireland and Slovenia drug regulator authorities in between 31st July and 4th August 2017. The inspection has concluded with no critical observations – Positive for Divis; stock is up by 1%+. Resolution of USFDA form 483 will be key monitorable to watch for.

IOCL: Plans to double refinery capacity to 150mtpa by 2030 from 80.7mtpa currently; long term positive
Indian Oil Corporation (IOCL) plans to nearly double its refining capacity to 150mtpa by 2030 from 80.7mtpa currently.  The refinery expansion plans include 60mtpa refinery project on the west coast along with BPCL and HPCL, increase Gujarat refinery capacity to 18mtpa from 13.7mtpa and Panipat refinery capacity to 20.2mtpa from 15mtpa. Long term positive for IOCL.

ONGC: buys 80% stake in GSPC’s KG-OSN-2001/3 block – negative read through for ONGC
Oil and Natural Gas Corporation (ONGC) has bought 80% participating interest and operatorship in KG-OSN-2001/3 block of Gujarat State Petroleum Corporation (GSPC) in Krishna Godavari Basin at a purchase consideration of $995.26million for Deen Dayal west field and $200million for six other discoveries. We highlight here that the reserve base for the block has been lowered drastically to around 1.6trillion cubic feet (vs initial estimates of around 20trillion cubic feet) and the gas fields in the block are struggling to start commercial production from Mid-2014 – negative read through for ONGC.

Bank of Baroda: BoB has cut the interest rates on savings bank accounts (on deposits of up to Rs 50 lakh) to 3.5 per cent – Positive read thru

Berger Paints: Q1FY2018 result-revenue declined by 9% YoY and PAT fell by 6% YoY, capex of Rs 200 crore lined up for FY2018
For Q1FY2018, Berger Paints reported 9% YoY growth in its consolidated revenues to Rs. 1363.5 crore. Its operating profit margin was down by 210BPS YoY at 13.6% due to the rise in raw material cost. PAT came in lower by 6% YoY to Rs. 112.9 crore. The company had taken two rounds of price hike (totalling to 5.5%) during March and May 2017. The price hike in May came after the peak April month for sales. The delayed price hike, along with de-stocking on account of GST in June dented the bottom line.   Berger Paints will invest Rs 200 crore as capex for FY2018. While Rs 40 crore will go towards setting up an emulsion unit in Howrah (Kolkata’s twin city), another Rs 20 crore will be towards setting up a colorant unit at Rishra. Another Rs 60 crore will go as investment towards its Jejuri plant in Pune. The remaining will be used across its other units.

NTPC: eyes pan India license to set up EV charging points; positive read through

Adani Transmission: Acquisition of SPVs Barmer Power Transmission Service Limited and Thar Power Transmission Service Limited from Rajasthan Transco through competitive bidding; positive

Divestment: Government of India to divest stake in BPCL, NTPC, GAIL, NLC, SJVN, Indian Bank, NHPC, L&T via the new ETF

GTPL Hathway: Partners with Nagra for digital and interactive content, stock to be in focus

Partners with Nagra, a digital TV division of Kudelski group and Samsung, for the delivery of digital and interactive content directly to TV without the need of a set top box

MORE NEWS

GST rollout has been smooth: Arun Jaitley
Mukesh Ambani's plan to make RIL most innovative co
Air India stake sale: Parl panel to hear govt views
Modi's black money drive gets a big Swiss fillip
Eros, Apple explore mega $1-billion content sale
Srei Group likely to have sold stake in Viom for loss
Lenders meet today to review insolvency cases
Sebi plans to beef up cyber security, hire advisor to tackle tech glitches
CCL gets green nod for Rs 1,538-cr Konar mine expansion
UK ready to pay up to 40 bn euros to leave European Union: Report
UK-based Liberty House sends plan on ABG Shipyard to NCLT
India’s LNG shipbuilding plans run aground
Bank unions call for all-India strike on Aug 22
Regulations in auto sector still evolving in India, says McKinsey
Calls for rate reviews for 150 items with GST Council
TRAI, app firms to deliberate on speed testing methodologies 
Nifty may double within 3-4 years: Mark Mobius
12 PSU banks firming plans to raise funds from markets
Switzerland finds India’s data security laws adequate for auto-sharing bank info
NTPC seeks licence to set up charging stations for electric vehicles
ICEX likely to launch diamond futures trading by August-end
US municipal bond sales fall, on course for long-term supply drop
Consensus on SAIL, ArcelorMittal JV deal likely in 2 months: Niti Aayog
MobiKwik eyes raising $100 million in funding this year
Hindustan Zinc to become fully underground mining company by FY19
SBI, ONGC, IOC part of new ETF
Govt to sell up to 25% stake in 4 defence PSUs via IPO

STOCK IN NEWS

1. GST cheer for Eveready as it eyes 10-15% growth in FY18
2. Ramco Cements to invest over Rs 1,000 crore
3. Court rejects Reliance Jio's plea against Airtel on network speed
4. MobiKwik plans to raise $100 mn funding from investors to fuel expansion
5. Air India divestment: Parliamentary panel to hear govt views on Tuesday
6. Captive mine remains a pipe dream for Vizag Steel
7. Godrej Interio to invest Rs 400 cr in next 3 years to enhance production
8. Sun Pharma Advanced Research Company Q1 loss widens to Rs 79 cr
9. IndianOil to buy 50% in GSPL-Adani LNG terminal
10. ONGC buys 80% stake in GSPC's KG basin gas block
11. Tobacco lobby hits back at govt over e-cigarette stubbing plan
12. Vedanta Resources raises $1.8 bn to refinance two of its bond issues
13. L&T gets Rs 1050-cr contract for rail tracks electrification
14. IOC board approves Rs 15,034 cr to expand Gujarat refinery by 2022
15. Fortis Healthcare board approves to raise Rs 5,000 crore
16. Bank of Baroda introduces two-tier savings interest rate
17. Bank of India, Dena Bank allot shares to Government of India, LIC
18. Jubilant Lifesciences gets ANDA approval for spasticity drug
19. Atlas Cycles: Board approves 1:2 stock split
20. Autoline Industries: Sells its Pune property for the purpose of reducing its overall debt
21. Adani Transmission: Acquires two SPVs from Rajasthan Transco for an undisclosed sum

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